Massachusetts: Subsidy Program

Massachusetts: Subsidy Program

Upshot

  • Democrats proposed a pilot program (H.B. 5123) that would expand eligibility for Massachusetts’s Marketplace health care subsidy program to individuals with incomes between 300 percent and 500 percent FPL. Currently, individuals with incomes up to 300 percent FPL who meet federal criteria for Marketplace coverage are eligible.

  • The bill was part of the General Appropriations Bill in 2022. After several rounds of back-and-forth with the governor regarding amendments to require further study before implementation of a pilot program, Gov. Baker vetoed the bill.

  • Republican Gov. Baker indicated that he would not support the program without further study of the impacts on the delivery system.

Background

Massachusetts runs a state-based Marketplace called the Health Insurance Connector. Importantly, Massachusetts has an individual coverage mandate meaning that residents must purchase health insurance coverage or else incur a financial penalty. Because of this mandate, the state maintains a strong subsidy program to keep coverage affordable and avoid penalizing people who are required to be covered even if they would not normally choose to purchase health insurance. Massachusetts’s ConnectorCare is a  health care subsidy program, combining state and federal subsidies to assist with health care costs in the Health Insurance Connector. Massachusetts covers the difference between federal subsidies and ConnectorCare cost-sharing. The program was based on Commonwealth Care which was the subsidy program that the ACA APTCs and CSRs were modeled after.

As a result of the mandate and subsidy program, Massachusetts has the highest rate of coverage in the country at 97 percent, and has the second-lowest average monthly premiums. Eligible residents can access silver-level plans with $0 premiums, no deductibles, and copays as low as $0 for primary care, specialist, emergency, urgent care, inpatient, and imaging services. Currently, residents are eligible for ConnectorCare if they meet federal criteria to receive Marketplace coverage and subsidies and have an income at or below 300 percent FPL. Sixty-two percent of Health Connector participants were enrolled in ConnectorCare in 2021 and over half of ConnectorCare enrollees had income between 150 percent and 250 percent FPL. The proposed expansion to 500 percent FPL would cover an additional 37,000 residents.

The proposal to expand ConnectorCare was initially included in the state budget proposal. However, it was removed by Gov. Baker who expressed concern about the potential impacts of the pilot program on carriers and enrollees in the Massachusetts Health Care Connector. Gov. Baker had requested that the bill include a provision to study the potential impacts of such a pilot program on the market and enrollees. The proposal was reintroduced by Democrats in the legislature, who wanted to use the state’s budget surplus from enhanced tax revenue and federal COVID-19 aid. Gov. Baker ultimately vetoed the legislation. Instead, Gov. Baker said that he would support efforts to maximize the uptake in affordable plans that are currently offered for the individuals who are eligible for affordable health plans through the Connector.

Summary

This legislation would create a two-year pilot program beginning June 1, 2023, to extend eligibility for premium assistance payments or cost-sharing subsidies for applicants with incomes up to 500 percent FPL in the Massachusetts Health Insurance Connector. Specifically, applicants with incomes between 300 and 500 percent FPL would qualify for a plan that would have an actuarial value of at least 90 percent and no deductible. The pilot program would be funded through the Commonwealth Care Trust Fund that is financed through employer medical assistance contribution, revenue from surcharges or penalties related to medical assistance contributions, and any other transfers or appropriations

The current ConnectorCare plan offerings are detailed in the table below with the proposed addition italicized:

The health insurance connector authority would consult with the Center for Health Information and Analysis to evaluate the pilot program and assess the health, equity, utilization, and financial impacts of reducing OOP and premium costs on residents. Data collected would include:

  • Rates of unmet medical need due to cost;

  • Disparities in rates of unmet need due to cost;

  • Difficulties accessing care at a doctor’s office or clinic;

  • Racial and ethnic disparities in difficulties accessing care at a doctor’s office or clinic;

  • Insurance coverage rates, including rates of continuous coverage;

  • Racial and ethnic disparities in insurance coverage rates;

  • Visits to a doctor’s office; and

  • Racial and ethnic disparities in visits to a doctor’s office.